Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

Lexington Realty Trust Is Deeply Undervalued With 30% Upside Potential Within A Year

The Buy Thesis

At 10X forward FFO Lexington Realty Trust (NYSE:LXP) is unusually cheap for a company with reliable revenues and strong growth potential. Current pricing represents outsized reward/risk, which will stimulate capital appreciation as the market begins to see the value. There are four catalysts in place to speed the market's recognition of LXP:

  1. External growth through a large and accretive build-to-suit pipeline
  2. Refinancing opportunities which go straight to the bottom line
  3. Internal growth through rent escalators on long NNN contracts.
  4. Dividend growth

Before exploring each catalyst in depth, we would like to begin by showing just how cheap LXP shares are.

Relative Value

LXP is a triple-net-lease REIT with most of its properties classified as industrial...

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